The enigmatic Toronto billionaire says in an exclusive interview he has decided to keep what has been billed as Canada's most expensive condominium, valued at up to $20 million, at the Trump International Hotel & Tower for himself.
A work in progress, his mansion in the sky could be as large as 14,000 square feet, and will have, in some areas, soaring 9-metre ceilings.
"You can put an observatory up there. It's a great place to get away from the wife if we ever have a fight," joked Shnaider.
While New York billionaire Donald Trump is the brand, Shnaider, at 39 Canada's youngest billionaire, is the financial muscle behind the ultra-luxury project in the city's financial district.
The most expensive condo sold in the city so far is thought to be former Bank of Montreal CEO Tony Comper's One St. Thomas penthouse at $15 million.
Shnaider – whom Forbes says is the 557th richest man in the world with a net worth of $1.8 billion (U.S.) – will presumably give himself a respectable friends-and-family discount, but his is an expensive pied-à-terre. He is already building a magnificent new home in Toronto, less than half an hour away.
And it's not as if he's living in squalor now. His current 15,000-square-foot residence is a traditional stone mansion put together in 2000 by celebrity designer Katherine Newman. The property was listed for $10.9 million (Cdn.) two years ago when he was thinking of relocating to Russia, but it was taken off the market after he decided to keep his headquarters in Toronto.
The home is stunning, decorated in a traditional English manor style, but the security-conscious billionaire allowed the Star a rare glimpse of his residence only if its location not be revealed. In the garage is a gleaming silver $450,000 (U.S.) Mercedes SLR McLaren, barely 2,000 kilometres on the odometer.
A car nut, he most famously bought a Formula One team in 2005 for $50 million and sold it last year for $106.6 million.
Other toys include a 170-foot Benetti yacht, the Midlandia, (which sleeps 12 and rents for a mere $270,000 a week when he's not using it) and a private jet.
How did Shnaider get this rich?
His private company Midland Group, which he runs with London-based partner Eduard Shifrin (number 538 on the Forbes list at $1.9 billion) has diverse holdings, including steel mills in the Ukraine, the national power grid of Armenia, real estate, retail malls, and manufacturing in Russia and Siberia. The company has 34 offices and more than 50,000 employees and earnings in excess of $2 billion annually.
And Shnaider, it seems, is putting some of that money where his mouth is – at least with his $500 million (Cdn.) Toronto venture.
Rumours have persisted at the Trump site on Bay and Adelaide Sts. that sales were poor and the project was destined for failure.
Shnaider was taking a three-week break with his family on the Midlandia – he may have been in the waters of Turkey at the time, or it could have been Greece – when the call came that news had broken in the Toronto Star that his 70-storey Trump International Hotel & Tower was going to be downsized and eleven residential floors, including two hotel floors, lopped off.
"The hotel part of the sales was always doing well. Residential sales were a problem," says Shnaider.
"A lot of buyers were buying for themselves, usually people working on Bay St. and, because of the skepticism, when they didn't know a date they are quite reluctant. This is especially true for the larger, more expensive units because you have talk on the street that it won't be built."
But Shnaider said he expects construction to start in September. He also says 75 per cent of the building is sold. Over the past two and a half years, the developer says, approximately $275 million worth of property has been sold.
The original plans called for only four residential units per floor, but that had to be changed, he says.
"We needed to stimulate sales because the units were very big and expensive and they weren't selling as fast as we would have liked," he says candidly. "We ended up making this six units per floor to make it more affordable."
The higher density meant that something had to go, says Shnaider.
But even with 13 fewer storeys, the high ceiling heights in the building will still make it the tallest residential tower in the city, he says.
"We ended up with more units than we were allowed to have for engineering purposes. To provide the amount of service necessary, we couldn't do it with the higher density, we really had to make the building smaller," he says.
When the building was shortened, there was skepticism from some in the real estate community that the rationale was pure spin to explain falling sales.
In an earlier Star story, one of Shnaider's executives said one reason for the height reduction was "the more residents we had, the more elevators were going to be used, and that wasn't what we wanted in an exclusive building like Trump." (Four elevators are designated for residents for the 57 habitable floors, although the building may be two stories higher to allow for mechanical systems.)
What is known is that sales for the tower started in September 2004, three years before the proposed start of construction. In comparison, it took competitor Ritz Carlton 14 months to break ground.
But the buck stops with Shnaider, who is remarkably frank during the interview. He says he isn't sure why the $500 million project didn't sell as well as expected initially, although sales have been better since the smaller suites were introduced.
"We were certainly asking very high prices at the time. But we may have been too early for the market," he says, noting that the Four Seasons and the Shangri-La hotel brands now have condominiums selling in Toronto.
"We started at $700 a square foot, which was unheard of back then and now we're over a thousand a square foot. But I think the market has caught up."
His purchase of the penthouse, meanwhile, may prompt skepticism that Shnaider couldn't find a buyer for the pricey property. But he insists that he's buying because "it's a good investment."
One gets the sense that Shnaider would break ground if only as a point of pride – whether it made money or not. But the business person in him seems resolute: "If this were a loss-making venture, I wouldn't go ahead," he says.
Shnaider has shown he knows when to cut and run: He sold the Formula 1 Team in short order because he couldn't find a Russian sponsor. "We underestimated the interest of Russian companies, thinking they would embrace it more than they did," he says.
And, despite the prominence of the Trump project, it is only one small part of his diverse holdings.
Over the past two months, for example, he has rolled out a new convenience store chain in the Ukraine, tapping the need for modern community-based retail. He plans to open 1,500 stores in the next several years.
But the Trump project is the most visible part of his empire, especially since it's in his backyard.
"I wanted to build something important in the city, something I could be proud of," he says.
By the time Shnaider bought the site, the Trump Tower was already steeped in controversy. "I knew from the beginning this wouldn't be an easy project," he says.
The site was initially supposed to have been a Ritz Carlton hotel and condominium, with Donald Trump as a partner, when it was first announced in 2001.
That soon fizzled after the Star revealed one of the original partners had been convicted of bankruptcy fraud and embezzlement in the United States and had fled to Canada. The Ritz Carlton backed out, eventually finding a new site years later at Simcoe and Wellington Sts.
Meanwhile, the original location was sold to Shnaider and his development company. Trump remained as a partner and his brand was put on the hotel – the flamboyant developer's first venture at the time outside the United States.
It seemed like an ideal match: Two billionaires who exemplified the high life would be creating one of the world's tallest and most luxurious residencies in Toronto.
In many ways the building symbolized the loftiness of Shnaider's ambition. To say his rise was meteoric seems almost like an understatement, since he formed the holding company Midland Resources only in 1994 at the age of 26.
Born in St. Petersburg, Shnaider moved to North York when he was 13. His parents, an engineer and a dentist, ended up buying a deli.
Shnaider went to William Lyon Mackenzie C.I. while helping his parents in the deli. He later studied economics at York University.
With help from his politically connected future father-in-law, Shnaider ended up in the steel business, eventually setting up his own steel trading shop in Russia. One of his big customers was the Zaporizhstal plant in eastern Ukraine, one of the country's largest steel producers. With privatization in the '90s, after the collapse of the Soviet Union, Shnaider and his partner Shifrin, an academic with a PhD in metallurgical engineering, formed Midland. They eventually bought the Zaporizhstal plant.
From there, they built a substantial collection of assets throughout Eastern Europe.
The steel plant acquisition was perfect timing, as prices for the material started to jump with the economic rise of India and China. Now the industry is in major consolidation, with steel mills fetching hefty premiums. Asked whether he would sell, Shnaider says with a smile, "Everything is for sale. ... But we are concentrating on other areas such as retail and real estate."
It continues to be a sore point with the self-made billionaire, however, that a negative stigma seems to surround successful Russians.
He wrote a letter to Forbes after a mostly laudatory profile of him in 2005 that referred to the "murky" world of Russian business.
"There is this stereotype that was especially strong during the '90s that every Russian who is successful or made money must have done so through connections with the mafia, or arms dealing or prostitution, which I find really offensive," he says. "But Russians are incredibly educated people who are fast learners and willing to work hard. That is the stereotype you don't hear about as much."
Time is precious for Shnaider, who travels constantly, including an appointment in New York this day. He glances at his oversized watch, a $150,000 Audemars Piguet Royal Oak tourbillion. After saying goodbye to his guests, he slips into a jacket by Neapolitan tailor Attolini.
Then it's into the sports car and a brisk drive to his waiting jet.
Thestar
Toronto real estate. THE STORY BEHIND TRUMP TOWER IN TORONTO
![Toronto real estate. THE STORY BEHIND TRUMP TOWER IN TORONTO]()
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